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Economics Advances in Diffusion Models

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Title Economics Advances in Diffusion Models
Period 01 / 2007 - 12 / 2011
Status Completed
Dissertation Yes
Research number OND1333872
Data Supplier Website ERIM

Abstract

This project deals with generations of products, where each new generation amounts to a certain improvement over previous products. Examples are consumer electronics, cars and student textbooks. Planned obsolescence entails that firms purposely launch new generations too early, which means that previous generations become obsolete while they could have served their purpose for a longer period. Several theories on the optimal time to launch a new generation support such planned obsolescence. It is widely assumed that planned obsolescence comes at the benefit of firms or retailers, but not of consumers. In this project we aim to investigate this latter claim. In this investigation we incorporate (amongst other things) that more available generations imply more choice opportunities, that new products are most likely of higher quality, and that consumers can adopt pull strategies (which in fact forces firms to launch new products earlier than planned). This project sheds light on the problem of the optimal introduction time of new generations and planned obsolescence from three different perspectives. The sales perspective of companies Theoretical perspective Consumer choice perspectives The way we will contribute to the current literature is twofold. First, we want to develop new theories on planned obsolescence by incorporating psychological and sociological consumer influences. Second, it is intended to create new models to empirically test these as well as current theories of planned obsolescence.

Related organisations

Related people

Supervisor Prof.dr. Ph.H.B.F. Franses
Co-supervisor Prof.dr. D. Fok
Doctoral/PhD student Dr. Y. Peers

Classification

A54000 Marketing and consumption
D43000 Economics

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